Monthly Archives: March 2012

Taking advantage of relaxed campaign finance laws, a cadre of deep-pocketed donors are spending gobs of money to bankroll super PACs, a phenomenon that is reshaping the modern election cycle.

It is a select group. The top 100 individual super PAC donors make up just 3.7% of those who have contributed to the new money vehicles, but account for more than 80% of the total money raised, according to data from the Center for Responsive Politics.

And just the top 46 donors have given a total of $67 million, or two-thirds of the $112 million in individual gifts to super PACs this cycle. Membership in this select group requires a $500,000 minimum donation.

So who are these folks?

Donors who have given in excess of $500,000 are a rather homogenous group who represent narrow swaths of American industry.

Titans of the financial services industry are well represented, as are energy executives and hoteliers. Almost all are men. Racial minorities are few and far between. So far, the vast majority of their contributions have been made to conservative groups.

“We’re looking at a singularly weird phenomenon,” said John Dunbar, the managing editor for politics at the Center for Public Integrity.

Dunbar argues that super PAC donors can be grouped into general categories based on which presidential hopeful they favor.

John Paulson, the hedge fund manager who generated returns of up to 600% by betting against mortgages in 2008, has donated $1 million to Romney-affiliated super PAC Restore Our Future.

Executives from Tiger Management, Bain Capital, and a smattering of other firms have made sizable contributions as well.

“The financial sector is one where there’s a lot of money, and it’s a sector with which Romney is very familiar, so it’s not surprising that it would be a big source of contributions,” said Viveca Novak of the Center for Responsive Politics.

The donations to the pro-Romney super PAC top out around $1 million. Bigger individual donations have gone to the super PACs backing Newt Gingrich, Rick Santorum and Ron Paul.

Las Vegas Sands CEO Sheldon Adelson and his family have spent more than $15 million to support the pro-Gingrich committee Winning Our Future.

Adelson and his wife Miriam donated $5 million last month, or nearly 90% of the super PAC’s haul for February. With the Gingrich campaign struggling to raise funds, it is not a stretch to say that Adelson’s generosity has kept the former House speaker’s candidacy alive.

Silicon Valley venture capitalist and PayPal co-founder Peter Thiel has donated $2.6 million to the Ron Paul super PAC. That’s 70% of all money the group has raised. Rick Santorum has backers of his own.

“We’ve had a small group of donors maintain the viability of certain candidates,” said Paul S. Ryan, an attorney at Campaign Legal Center, which supports election law reforms. “It’s an Alice in Wonderland situation. It defies logic.”

Critics argue that the eye-popping size of donations from individuals raise important questions about their motivations and the ability of the wealthy to influence candidates and the election.

“American elections are funded by a very narrow range of special interests, and that has the effect of making our democracy look a lot more like a plutocracy,” Ryan said.

The floodgates of unlimited spending were opened by the Supreme Court’s Citizens United ruling, which placed individuals and corporations on equal “free speech” footing when it comes to independent campaign spending.

The high court’s decision allowed super PACs to raise unlimited sums of money from corporations, unions, associations and individuals, then spend unlimited sums to overtly advocate for or against political candidates.

Thomas Mann, a senior fellow at the Brookings Institution, said that it is difficult to discern the motivations of super-wealthy donors. Are they driven by ideology, economic interests, or some combination of the two?

Harold Simmons, who played a central role in the development of leveraged buyouts and corporate takeovers, offered some insight into that question last week.

Simmons has given $18 million to conservative super PACs this cycle, and has pledged millions more. In an interview with the Wall Street Journal, he displayed a deep unhappiness with President Obama, calling him a “socialist.”

At the same time, Simmons’ current business interests would benefit greatly from less government regulation of certain industries, and he told the WSJ that if Republicans do well in November, “we can block that crap [regulations].”

“So which is it?” Mann asked. “He may be a good businessman, but if he can make a comment like that about Obama, I’d say his ideology overwhelms his self interest.”

To date, conservative super PACs have far outpaced fundraising efforts by Democrats. “The pool of billionaires who can throw tens of millions into the game — and are inclined to do so — is concentrated on the right,” Mann said.

Democrats are trying to close the gap. In a sharp reversal, Obama’s reelection campaign has signaled they will begin using administration and campaign aides to fundraise for Priorities USA Action, a super PAC backing the president.

After registering anemic fundraising totals for months, the strategy seems to be working for Priorities USA Action, as the group brought in a $2 million donation from DreamWorks Animation CEO Jeffrey Katzenberg and $1 million from comedian Bill Maher.

Analysts expect Democratic donations to pick up as the general election approaches and Republicans settle on a candidate.

In the end, the most notable affect of super PACs might not be on the presidential race, but rather on Congressional elections.

Mann and Dunbar both expressed worry about the use of super PAC money in House and Senate races, where relatively small amounts of money can have an outsized impact.

“An individual donor and a super PAC could go off to some district in Kentucky and just completely destroy some candidate because he doesn’t favor what’s good for your business,” Dunbar said.

A young Navy vet who joined UPS in 1960 has just become the first driver in the company’s history to pass the 50-year mark for safe driving as a member of UPS’s “Circle of Honor.”

Ron “Big Dog” Sowder (the nickname comes from being the company’s longest-tenured safe driver) began his UPS career 50 years ago as a package car driver, delivering to businesses and private residences. In 1976, he shifted to driving tractor-trailers on the open road and has served as a UPS feeder driver ever since. Currently, Sowder transports packages five days a week, making a 306-mile round trip between the distribution center here and the UPS Worldport® global air hub in Louisville, Ky. Whether driving package cars or tractor trailers, the one constant with Sowder has been safety. More than 5,200 active UPS drivers currently are members of the “Circle of Honor” – meaning they’ve gone at least 25 years without an accident – but until yesterday, no driver in the company’s history had ever hit the 50-year mark.

A native of Springboro, Ohio, Sowder figures during the course of his career he’s driven more than 4 million miles; transported more than 35 million packages, and climbed into a UPS truck more than 12,000 times.

“Ron continues to set and reset the gold standard for our drivers,” said Myron Gray, UPS’s president of U.S. operations. “He is an asset to UPS, a great example for all our drivers and a leader within his peer group of Circle of Honor members. It’s operators like Ron who help ensure UPS is able to keep its promises to its customers.”

“A lot’s changed in 50 years,” said Sowder. “When I started driving for UPS, folks in cars did a better job of keeping their hands on the wheel and their eyes on the road. Now it seems like anything goes – texting, putting on makeup. I’ve even seen folks reading books behind the wheel. The need for defensive driving, getting the big picture, leaving a space cushion, those are more important than ever.”

To help UPS drivers one day match or exceed Sowder’s historic mark, all drivers are taught safe driving methods beginning on the first day of classroom training, including the company’s comprehensive safety course, “Space and Visibility.” The training continues throughout their careers.

UPS’ new device, which will go out to 100,000 brown-clad drivers, has some amazing features. But like any mobile device these days, it’s already on the road to obsolescence.

Given how long UPS has been using mobile devices, you couldn’t blame the company if it ended up sounding like the grumpy old man of the smartphone world: “You damn kids, I’ve been doing mobile devices for 20 years, back when those Apple whippersnappers were still tinkering with their Macintoshes. When I started wireless roaming, you had to wrangle with 200 carriers just to get across the country.”

Instead, UPS sounds just like the rest of us–eager to put the latest and greatest smartphone and tablet features to work. UPS is starting the global rollout of the fifth generation of it mobile handheld device, called Diad, and it will deploy about 100,000 of the units by the time the rollout is complete in 2013. Drivers use Diad to access and send package and delivery information, collect customer signatures, and more. While no one will mistake Diad V for an iPhone, with this version’s touchscreen, camera, speedy processor, and 1 GB of memory, at half the size of its predecessor, UPS draws more than ever on features similar to consumer mobile technology.

But UPS also faces the same harsh reality as every company using mobile technology: Technology cycle times are getting shorter, in part because consumer tech lives on six- to 18-month turns, not the three to five years business IT prefers.

UPS launched its last mobile handheld, the Diad IV, in 2004, so it’s now eight years to the widespread rollout of this new version. While Diad V will be in service for years, no doubt UPS will have to iterate to its next version much faster than in the past. Laynglyn Capers, VP of IS operations at UPS, can’t say exactly when a Diad VI might come, “but I know we’re working on it now.”

Here’s a look at the new features UPS brings with its latest mobile device:

Roaming: The UPS device is constantly monitoring wireless performance and will automatically skip to another network to keep its connection. The cellular connection is used to constantly send reports to the data center that a package is delivered or picked up, which is critical data for letting customers track packages. But beyond connectivity, the roaming feature also searches out the optimal mix of performance and cost, so if two carriers each offer sufficient performance it’ll pick the one that costs UPS the least. Pretty impressive, and a feature smartphone consumers would surely love.

Touchscreen: The new Diad has a touchscreen for the first time that should boost driver productivity. However, it doesn’t recognize gestures the way an iPhone does. It can’t do multitouch, for example, so a driver can’t pinch to zoom in on text, or use a finger to flip through screens. Gestures are one of the features Capers would like to bring to the next device. On the other hand, the screen is much more durable than a typical consumer smartphone’s. UPS puts it through a gauntlet of tests for heat, cold, drops, and rain that would kill the typical smartphone. Capers says UPS also is looking at rugged touchscreen tablets for use in distribution facilities, and he sees demand just starting to build for the kind of rugged tablet needed in that environment, and thinks vendors will get there soon.

Hardware specs: Diad V has 1 GB of flash memory, with a micro-SD slot that lets it expand to 32 GB. Its 1-GHz processor means it can run much more powerful apps than the previous version, apps that integrate via the wireless connection with server-side systems. That computer power will let UPS offer more personalized services, building on the My Choice service it launched last year, which lets customers create personalized delivery options, such as leaving packages with a particular neighbor if they’re not home.

Camera: You won’t be dazzled with the device’s 3-megapixel camera, but it’s a new feature with this device version. UPS hasn’t enabled cameras for use yet, but the idea is that drivers will use it for things like documenting proof of delivery or damage claims. UPS doesn’t expect drivers to send the images in real-time over the wireless network but instead will load them over the company Wi-Fi network when the devices are docked each night.

Navigation: The new device lets UPS load up all the route information a driver needs to go from site to site throughout the day. The devices have GPS, so UPS knows where the driver is at any time. The next leap for UPS will be providing real-time navigation, telling drivers the best way to get to their next delivery, perhaps even considering factors such as traffic congestion. Drivers always know where to go next. “What’s still left to do is help the driver get to the next place,” Capers says.

The prospect of real-time navigation shows the real power of mobile computing devices like UPS’, and it’s no different than consumer smartphones: It’s in the apps that companies build for them.